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SCHEDULE I - Parent Company Information | 12 Months Ended
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Dec. 31, 2018
SCHEDULE I - Parent Company Information |
SCHEDULE I - Parent Company Information | WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED BALANCE SHEETS Parent Company Information (In thousands, except share data)
|  | December 31, |  | December 31,
|  | 2018 |  | 2017
ASSETS |  |  |  |  |  |
Cash and cash equivalents |  | $ | 5,302 |  | $ | 2,860
Equipment held for operating lease, less accumulated depreciation |  |  | 618,167 |  |  | 662,162
Maintenance rights |  |  | 3,296 |  |  | 3,296
Equipment held for sale |  |  | 701 |  |  | 34,084
Receivables, net of allowances |  |  | 3,468 |  |  | 7,980
Spare parts inventory |  |  | 483 |  |  | 11,643
Due from affiliates, net |  |  | 14,877 |  |  | 18,439
Deferred income taxes |  |  | 13,896 |  |  | —
Investments |  |  | 47,941 |  |  | 50,641
Investment in subsidiaries |  |  | 141,792 |  |  | 50,047
Property, equipment & furnishings, less accumulated depreciation |  |  | 15,077 |  |  | 15,238
Intangible assets, net |  |  | 271 |  |  | 271
Prepaid deposits |  |  | 1,383 |  |  | 36,455
Other assets, net |  |  | 10,766 |  |  | 8,385
Total assets |  | $ | 877,420 |  | $ | 901,501
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |
Liabilities: |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 27,128 |  | $ | 15,686
Due to affiliates, net |  |  | 40,187 |  |  | 2,300
Deferred income taxes |  |  | — |  |  | 7,456
Debt obligations |  |  | 434,053 |  |  | 508,350
Maintenance reserves |  |  | 27,329 |  |  | 36,809
Security deposits |  |  | 10,692 |  |  | 17,795
Unearned revenue |  |  | 1,690 |  |  | 4,724
Total liabilities |  |  | 541,079 |  |  | 593,120
Redeemable preferred stock ($0.01 par value, 2,500 shares authorized; 2,500 shares issued and outstanding at December 31, 2018 and 2017, respectively) |  |  | 49,554 |  |  | 49,471
Shareholders’ equity: |  |  |  |  |  |
Common stock ($0.01 par value, 20,000 shares authorized; 6,176 and 6,419 shares issued and outstanding at December 31, 2018 and 2017, respectively) |  |  | 62 |  |  | 64
Paid-in capital in excess of par |  |  | — |  |  | 2,319
Retained earnings |  |  | 286,623 |  |  | 256,301
Accumulated other comprehensive income, net of income tax benefit |  |  | 102 |  |  | 226
Total shareholders’ equity |  |  | 286,787 |  |  | 258,910
Total liabilities, redeemable preferred stock and shareholders' equity |  | $ | 877,420 |  | $ | 901,501
The accompanying note is an integral part of the Consolidated financial statements. WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED STATEMENTS OF INCOME Parent Company Information (In thousands)
|  | Years Ended December 31, |
|  | 2018 |  | 2017 |  | 2016 |
REVENUE |  |  |  |  |  |  |  |  |  |
Lease rent revenue |  | $ | 70,269 |  | $ | 72,580 |  | $ | 76,283 |
Maintenance reserve revenue |  |  | 27,407 |  |  | 46,163 |  |  | 30,742 |
Spare parts and equipment sales |  |  | 35,388 |  |  | 35,903 |  |  | 8,404 |
Gain on sale of leased equipment |  |  | 6,183 |  |  | 3,696 |  |  | 3,322 |
Other revenue |  |  | 13,624 |  |  | 9,881 |  |  | 10,660 |
Total revenue |  |  | 152,871 |  |  | 168,223 |  |  | 129,411 |
EXPENSES |  |  |  |  |  |  |  |  |  |
Depreciation and amortization expense |  |  | 34,795 |  |  | 40,560 |  |  | 43,451 |
Cost of spare parts and equipment sales |  |  | 32,331 |  |  | 29,705 |  |  | 6,591 |
Write-down of equipment |  |  | 2,567 |  |  | 17,881 |  |  | 5,989 |
General and administrative |  |  | 52,896 |  |  | 42,004 |  |  | 39,201 |
Technical expense |  |  | 9,858 |  |  | 7,058 |  |  | 4,637 |
Net finance costs |  |  | 25,210 |  |  | 25,215 |  |  | 23,358 |
Total expenses |  |  | 157,657 |  |  | 162,423 |  |  | 123,227 |
Earnings from operations |  |  | (4,786) |  |  | 5,800 |  |  | 6,184 |
Earnings from joint ventures |  |  | 3,800 |  |  | 7,158 |  |  | 1,813 |
Income before income taxes |  |  | (986) |  |  | 12,958 |  |  | 7,997 |
Income tax (benefit) expense |  |  | (280) |  |  | 4,843 |  |  | 4,710 |
Equity in income of subsidiaries, net of tax of $13,323, $(30,990), and $5,168 at December 31, 2018, 2017 and 2016, respectively |  |  | 43,937 |  |  | 54,043 |  |  | 10,782 |
Net income |  |  | 43,231 |  |  | 62,158 |  |  | 14,069 |
Preferred stock dividends |  |  | 3,250 |  |  | 1,813 |  |  | 281 |
Accretion of preferred stock issuance costs |  |  | 83 |  |  | 46 |  |  | 8 |
Net income attributable to common shareholders |  | $ | 39,898 |  | $ | 60,299 |  | $ | 13,780 |
The accompanying note is an integral part of the Consolidated financial statements. WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Parent Company Information (In thousands)
|  | Years Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Net income |  | $ | 43,231 |  | $ | 62,158 |  | $ | 14,069
Other comprehensive income: |  |  |  |  |  |  |  |  |
Currency translation adjustment |  |  | (770) |  |  | 896 |  |  | (868)
Unrealized gains on derivative instruments |  |  | 533 |  |  | 1,061 |  |  | 69
Net (loss) gain recognized in other comprehensive income |  |  | (237) |  |  | 1,957 |  |  | (799)
Tax benefit (expense) related to items of other comprehensive income |  |  | 54 |  |  | (686) |  |  | 275
Other comprehensive (loss) income |  |  | (183) |  |  | 1,271 |  |  | (524)
Total comprehensive income |  | $ | 43,048 |  | $ | 63,429 |  | $ | 13,545
The accompanying note is an integral part of the Consolidated financial statements. WILLIS LEASE FINANCE CORPORATION AND SUBSIDIARIES SCHEDULE I — CONDENSED STATEMENTS OF CASH FLOWS Parent Company Information (In thousands)
|  | Years Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Cash flows from operating activities: |  |  |  |  |  |  |  |  |
Net income |  | $ | 43,231 |  | $ | 62,158 |  | $ | 14,069
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |
Equity in income of subsidiaries |  |  | (43,937) |  |  | (54,043) |  |  | (10,782)
Depreciation expense |  |  | 34,795 |  |  | 40,560 |  |  | 43,451
Write-down of equipment |  |  | 2,567 |  |  | 17,881 |  |  | 5,989
Stock-based compensation expenses |  |  | 5,410 |  |  | 4,270 |  |  | 3,717
Excess tax benefit from stock-based compensation |  |  | — |  |  | — |  |  | 236
Amortization of deferred costs |  |  | 3,324 |  |  | 3,085 |  |  | 2,704
Allowances and provisions |  |  | 439 |  |  | 76 |  |  | (1)
Gain on sale of leased equipment |  |  | (6,183) |  |  | (3,696) |  |  | (3,322)
Gain on insurance settlement |  |  | — |  |  | (1,288) |  |  | —
Income from joint ventures |  |  | (3,800) |  |  | (7,158) |  |  | (1,813)
Loss on extinguishment of debt |  |  | — |  |  | — |  |  | 137
Loss on disposal of property, equipment and furnishings |  |  | 41 |  |  | — |  |  | —
Deferred income taxes |  |  | (434) |  |  | 4,843 |  |  | 4,710
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |
Receivables |  |  | 4,073 |  |  | 5,366 |  |  | (4,884)
Distributions received from joint ventures |  |  | 5,730 |  |  | 1,880 |  |  | 1,167
Spare parts inventory |  |  | 7,320 |  |  | 5,612 |  |  | (1,608)
Intangibles |  |  | — |  |  | — |  |  | (750)
Other assets |  |  | (3,983) |  |  | (4,259) |  |  | (2,648)
Accounts payable and accrued expenses |  |  | 19,459 |  |  | 2,370 |  |  | 3,723
Due to / from subsidiaries |  |  | 41,449 |  |  | 8,584 |  |  | (4,437)
Maintenance reserves |  |  | (9,500) |  |  | 7,906 |  |  | 16,583
Security deposits |  |  | (6,773) |  |  | 6,876 |  |  | (2,283)
Unearned lease revenue |  |  | (3,034) |  |  | 906 |  |  | 878
Net cash provided by operating activities |  |  | 90,194 |  |  | 101,929 |  |  | 64,836
Cash flows from investing activities: |  |  |  |  |  |  |  |  |
Increase in investment in subsidiaries |  |  | (9,104) |  |  | (45,609) |  |  | (2,329)
Distributions received from subsidiaries |  |  | 388,910 |  |  | 347,626 |  |  | 15,500
Proceeds from sale of equipment held for operating lease (net of selling expenses) |  |  | 48,049 |  |  | 33,118 |  |  | 60,893
Capital contribution to joint venture |  |  | — |  |  | — |  |  | (5,545)
Proceeds from insurance settlement |  |  | — |  |  | 14,886 |  |  | —
Purchase of equipment held for operating lease |  |  | (417,857) |  |  | (354,918) |  |  | (167,874)
Purchase of maintenance rights |  |  | — |  |  | — |  |  | (5,530)
Purchase of property, equipment and furnishings |  |  | (1,104) |  |  | (268) |  |  | (443)
Net cash provided by (used in) investing activities |  |  | 8,894 |  |  | (5,165) |  |  | (105,328)
Cash flows from financing activities: |  |  |  |  |  |  |  |  |
Proceeds from issuance of notes payable |  |  | 386,000 |  |  | 350,500 |  |  | 149,000
Debt issuance cost |  |  | — |  |  | — |  |  | (3,808)
Principal payments on notes payable |  |  | (462,119) |  |  | (470,606) |  |  | (93,055)
Interest bearing security deposits |  |  | — |  |  | (2,261) |  |  | 455
Proceeds from shares issued under stock compensation plans |  |  | 245 |  |  | 177 |  |  | 155
Repurchase of common stock |  |  | (16,136) |  |  | (3,546) |  |  | (28,958)
Proceeds from issuance of preferred stock |  |  | — |  |  | 29,663 |  |  | 19,752
Preferred stock dividends |  |  | (3,348) |  |  | (1,311) |  |  | —
Cancellation of restricted stock units in satisfaction of withholding tax |  |  | (1,288) |  |  | (1,094) |  |  | (1,369)
Net cash (used in) provided by financing activities |  |  | (96,646) |  |  | (98,478) |  |  | 42,172
Increase/(decrease) in cash and cash equivalents |  |  | 2,442 |  |  | (1,714) |  |  | 1,680
Cash and cash equivalents at beginning of period |  |  | 2,860 |  |  | 4,574 |  |  | 2,894
Cash and cash equivalents at end of period |  | $ | 5,302 |  | $ | 2,860 |  | $ | 4,574
Supplemental disclosures of cash flow information: |  |  |  |  |  |  |  |  |
Net cash paid for: |  |  |  |  |  |  |  |  |
Interest |  | $ | 23,525 |  | $ | 21,761 |  | $ | 20,619
Income Taxes |  | $ | 795 |  | $ | 180 |  | $ | 20
Supplemental disclosures of non-cash investing and financing activities: |  |  |  |  |  |  |  |  |
Engines and equipment transferred to the parent from its subsidiaries |  | $ | — |  | $ | 17,910 |  | $ | 229
Engines and equipment transferred to the subsidiaries from the parent |  | $ | 42,456 |  | $ | — |  | $ | —
Transfers from Equipment held for operating lease to Equipment held for sale |  | $ | — |  | $ | 31,571 |  | $ | 18,194
Transfers from Equipment held for sale to Spare parts inventory |  | $ | 26,387 |  | $ | — |  | $ | —
Transfers from Property, equipment and furnishings to Equipment held for lease |  | $ | — |  | $ | — |  | $ | 2,925
Accrued preferred stock dividends |  | $ | 686 |  | $ | 783 |  | $ | 281
Accretion of preferred stock issuance costs |  | $ | 83 |  | $ | 46 |  | $ | 8
The accompanying note is an integral part of the Consolidated financial statements. WILLIS LEASE FINANCE CORPORATION SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF PARENT Note to Condensed Financial Information of Parent 1. Organization and Summary of Presentation The accompanying condensed financial statements include the activity of the Parent Company. These condensed financial statements have been presented for the parent company only and should be read in conjunction with the Consolidated Financial Statements and notes thereto of the Company set forth in Part II, Item 8 “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=108774443&loc=d3e5283-111683 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 235 -Section S99 -Paragraph 2 -Subparagraph (SX 210.9-06) -URI http://asc.fasb.org/extlink&oid=6882215&loc=d3e537971-122884 + Details
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